Little-known contractor has close ties with staff of NSA

January 29, 2006|By SIOBHAN GORMAN | SIOBHAN GORMAN,SUN REPORTER

When the National Security Agency went shopping for a private contractor to help it build a state-of-the-art tool for plucking key threats to the nation from a worldwide sea of digital communication, the company it chose was Science Applications International Corp.

More than three years later, the project, code-named Trailblazer, still hasn't gotten off the ground. And intelligence experts inside and outside the agency say that the NSA and SAIC share some of the blame.

Investigations of Trailblazer's early years by Congress and the NSA inspector general criticized the agency for its "confusion" about what Trailblazer would ultimately accomplish and for "inadequate management and oversight" of the program to improve collection and analysis of mountains of digital information.

Unsolved problems

When SAIC came on board as the lead contractor in 2002, NSA had not solved those problems, said intelligence officials with extensive knowledge of the program.

But SAIC did not provide computer experts with the technical or management skills to pull off a system as complex as Trailblazer, the intelligence experts said. Moreover, they said, SAIC did not say no when NSA made unrealistic demands.

"The system in the Pentagon and defense-related agencies is notoriously susceptible to slippage and overruns," said Gordon Adams, director for security policy studies at George Washington University.

"A lot of the [information technology projects] are traffic accidents waiting to happen," said Adams, who was speaking generally. "There's a penchant, particularly in the [information technology] area, to overdesign things, promise it will deliver all kinds of things and not be able to deliver on the project."

SAIC is among the fastest-growing government contractors in the country, expanding from an annual revenue of $243,000 in 1970 to more than $7.2 billion today.

43,000 employees

The federal government accounts for two-thirds of San Diego-based SAIC's work, and the company has offices in 29 Maryland communities.

Some of SAIC's 43,000 employees worldwide could become millionaires if the company follows through on its plans to go public this year.

As SAIC has grown, it has forged close ties to several key defense and intelligence agencies, including the NSA. Among those who have served on SAIC's board of directors are former NSA Director Bobby Ray Inman; former CIA Directors John M. Deutch and Robert M. Gates; and former Defense Secretaries Melvin R. Laird and William J. Perry.

The door swings so regularly between the NSA and SAIC that the company has earned the nickname "NSA West" inside the intelligence community.

The Trailblazer project illustrates that point. William B. Black Jr. retired from his position in the elite senior cryptologic executive service at the NSA in 1997 to take a job as assistant vice president at SAIC.

Three years later, NSA Director Michael V. Hayden called Black back to the spy agency. By 2002, Black was overseeing NSA's Trailblazer project, with SAIC as its prime contractor.

Two other top NSA managers who worked on Trailblazer - Hal Smith and Sam Visner - also left the spy agency for jobs at SAIC. There, Smith worked on Trailblazer and the FBI's Virtual Case File program, according to a former senior intelligence official who spoke only on the condition of anonymity.

The FBI pulled the plug last year on the $170 million Virtual Case File program, which was supposed to bring the bureau's computer system into the 21st century, after it was criticized as unworkable by the Justice Department's inspector general and members of Congress.

The inspector general said the bulk of the program's problems were the fault of the bureau.

An NSA spokeswoman told The Sun in 2003 that Black sold his SAIC stock when he returned to the agency in 2000 and recused himself for a year from "involvement in any matter affecting the financial interests" of the company.

Varied criteria

The spokeswoman said SAIC, which was selected as the prime contractor for Trailblazer in 2002, was one of three companies seeking the contract. The choice, she said, was based on a "formal source selection process" that looked at technical issues, management, cost and past performance.

SAIC officials declined requests for interviews for this article, referring questions to the NSA.

In 2003, Mark V. Hughes, then executive vice president of SAIC, told The Sun that the company hires former government officials not for influence but for their expertise. "We do a much better job for our customers if we have people in the company who really know the customers," he said then.

Hughes also said the company is scrupulous about obeying laws designed to prevent conflicts of interest. "As a government contractor," he said then, "just one or two violations could cause us to be suspended from government contracts. That would destroy our company."

Hughes has since left the company.

Jacques Gansler, a former undersecretary of defense who is now vice president for research at the University of Maryland, said the revolving door between government agencies and private government contractors has an upside.

Without former government officials in their ranks, he said, companies would have a difficult time navigating the labyrinth of the government procurement process. Before he took his Pentagon job dealing with acquisitions, Gansler was a senior executive with TASC, a major defense contractor.